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Wells Fargo Commitment Could Potentially Result in Billions for Small Businesses
Kim Anthony • July 12, 2020
By Stacy M. Brown, NNPA Newswire Senior Correspondent
@StacyBrownMedia
In April, Wells Fargo announced it would donate gross proceeds from the Paycheck Protection Plan to nonprofits working with small businesses.
This month, the bank has ramped up its efforts by unveiling the details of an approximately $400 million initiative to help small businesses impacted by the ongoing COVID-19 pandemic.
The goal is to help keep the doors of small businesses open, retain employees, and rebuild.
Through Wells Fargo’s new Open for Business Fund, the company will engage nonprofit organizations to provide capital, technical support, and long-term resiliency programs to small businesses, emphasizing those that are minority-owned businesses.
“We realized early on that small businesses were taking the brunt of what was happening with COVID-19 and the economic slowdown that occurred,” said Jenny Flores, Wells Fargo’s head of small business growth philanthropy.
“We also noticed that diverse individuals were having a very negative impact, and with the data, it was coming to 41 percent or 450,000 Black-owned businesses closed when COVID hit. That is a disproportionate impact not only to the entrepreneurs but also to the employees they have and the pocketbook,” Flores stated.
Through June 30, Wells Fargo funded loans under the PPP for more than 179,000 customers, with an average loan amount of $56,000, totaling $10.1 billion.
Of the loans made, 84 percent of those are for companies with less than ten employees; 60 percent were for amounts of $25,000 or less; and, 90 percent of these applicants had $2 million or less in annual revenue.
Given the federal government’s extension of the PPP, Wells Fargo will reopen its PPP loan application process to eligible customers as soon as possible through a link in Business Online Banking, the bank noted in a news release.
Additionally, the Wells Fargo Open for Business Fund’s initial grants will allocate $28 million to Community Development Financial Institutions (CDFIs), also known as nonprofit community lenders.
The grants are aimed at empowering Black and African American-owned small businesses, which the National Bureau of Economic Research said are closing at nearly twice the rate of the industry.
Among the first grantees are Expanding Black Business Credit Initiative (EBBC), which will support the launch of a Black Vision Fund to increase the flow of capital to Black-focused CDFIs for transformational work to close the racial wealth gap in African American communities.
The CDFIs will also receive capital for urgent deployment to impacted businesses in the Mid-Atlantic, Southeast, and Midwest.
Further, a Local Initiatives Support Corporation (LISC) will provide grants and low-cost capital to more than 2,800 entrepreneurs, focusing on preventing loss in revenue, sustaining employment, and averting vacancies among vulnerable small business owners in urban and rural markets nationwide.
“This is an extension of the commitment we had to diverse businesses,” Flores noted.
“Small businesses need cash to open again, and we are putting $260 million for community development financial pocket lenders that have a track record of reaching diverse communities. We want them to be able to do new loans and to have grant money.”
Wells Fargo counts as one of the top PPP lenders in the country and has spent a lot of time understanding various strategies to assist small businesses, Flores declared.
“We have key members across the country, and I talk to entrepreneurs directly,” she said.
“This reflects a very thoughtful approach, one that is based on really putting the customer right at the center, listening to what they need. This has potentially $1 billion of impact in a three-year period,” Flores added.
“When they get the loans and recycle that and then for every million CDFI loans out to small businesses, they can support 18 businesses and create 31 jobs.
“Hence, if you take the $250 million and work through it, it’s thousands of businesses we’re impacting in such a positive way. We’re really proud of the opportunity we have to collaborate with CDFIs and particularly those who are led by diverse entrepreneurs.”
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(SACRAMENTO) In celebration of Black History Month, the California Legislative Black Caucus (CLBC) and the California Black Chamber of Commerce (CBCC) recognized 16 honorees at the annual Black Business Brunch on Feb. 10 at the Citizen Hotel in Sacramento. The small business owners from every corner of the state were recognized for their entrepreneurship, contributions to their respective communities, and vital roles in improving California's economic landscape. The proprietors were chosen by members of the CLBC and CBCC. They were honored on the Assembly floor at the State Capitol later that afternoon. “We gather here today to honor the incredible African American, small business owners of California,” Jay King, President and CEO of CBCC, told California Black Media. “We have to show them some love because they are the heart and soul of our communities. Their tireless work and unwavering dedication show what it means to be leaders”
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LOS ANGELES — In the wake of one of the most devastating natural disasters in California history, Governor Gavin Newsom today announced the launch of LA Rises, a unified recovery initiative that brings together private sector leaders to support rebuilding efforts led by the city of Los Angeles, Los Angeles County and the State of California. The Governor has enlisted Dodgers Chairman Mark Walter, business leader and basketball legend Earvin “Magic” Johnson, and Casey Wasserman, LA28 Chairperson and President to lead and recruit others to this private sector and philanthropic effort. To seed this new effort, Dodgers Chairman Mark Walter, the Mark Walter Family Foundation, and the Los Angeles Dodgers Foundation have provided an initial commitment of up to $100 million. With plans to raise additional funds through private donations, LA Rises will provide major resources aimed at helping Los Angeles communities most affected by these catastrophic fires recover and rebuild. LA Rises will marshal the full resources of the private sector, augmenting and amplifying local and state resources, to rebuild Altadena, Pasadena, the Pacific Palisades, and all impacted communities. As part of the unified effort, city and county leaders are crafting recovery plans for their communities. The state is mobilizing its resources and scale, coordinating with the federal government, and removing red tape. LA Rises will galvanize the private sector to unlock additional capital and find new and innovative tools to help communities build back faster and stronger. “Los Angeles will rise again — stronger, more united, and more resilient than ever. Just as California came together to fight the fires, we’ll work together to rebuild. With Mark, Earvin and Casey’s proven leadership and deep commitment to Los Angeles, we’ll tap into the enormous creativity, experience, and resources of the private sector, alongside local, state, and federal efforts, to deliver a recovery that benefits all Angelenos," said Newsom “The LA fires have wreaked havoc on LA’s neighborhoods. It’s time for those with means to come forward and make a positive impact to build back better,” Dodgers Chairman Mark Walter “This is a time for bold action. We’re bringing together the best resources and biggest hearts across California to ensure that every Angeleno — no matter their race, socioeconomic status, or neighborhood — has a chance to rebuild and thrive. This isn’t just about recovery; it’s about restoring communities while also making them more resilient and better than before,” Earvin “Magic” Johnson “I’ve been a lifelong Angeleno, and what I admire most about this city is its resilience and unity. There’s nothing Los Angeles can’t achieve. LA Rises will channel the unmatched creativity, resources, and generosity of the private sector to rebuild our city and pave the way for a stronger future," said LA 28 President Casey Wasserman “Given the scale and scope of damage and destruction the Eaton wildfire has left in its wake, I wholeheartedly welcome all the support from the state as well as the private sector as part of this initiative. By corralling and coordinating the work of philanthropy and private industry, this can complement our local recovery and rebuilding efforts, especially for our marginalized populations in Altadena who have lost everything. When it comes to supporting initiatives — like this one — that look to arm us with the resources to rebuild with a bottom-up approach, I’m all in,” said Los Angeles County Board of Supervisors Chair Kathryn Barger “Efforts to rebuild are underway in the City of Los Angeles and this announcement will be a vital component of a comprehensive effort to bring Angelenos home. The number one question on the minds of Angelenos is about recovery and rebuilding. I am grateful that the Governor and the LA Rises initiative will be there to partner with us, developing solutions to support our work. In recent days, the strength and resilience of Los Angeles have been felt throughout the state, the nation and the world. I want to thank the Governor for his continued partnership and his collaboration during this difficult time for our city," said Mayor of Los Angeles Karen Bass How LA Rises will work LA Rises will contribute through collaboration, access to capital and financial tools, leveraging innovation and private-sector investment to drive a faster recovery. It will support the broader recovery efforts by: Fundraising and expanding access to philanthropic and private capital. Formulating financing strategies to close the gap between available resources and the cost to rebuild Collaborating with other philanthropic and community organizations to maximize the impact of ongoing rebuilding and recovery efforts. Supporting unified communication efforts to arm Angelenos with up-to-date, factual information, timelines for rebuilding, and available resources. In addition to the financial commitment from the Mark Walter Family Foundation, and the Los Angeles Dodgers Foundation, LA Rises will receive financial support from California Rises, a statewide recovery initiative founded by Governor Newsom and First Partner Siebel Newsom after the 2018 Camp Fire. A partnership between the Governor’s Office and the California Fire Foundation, California Rises is dedicated to supporting communities impacted by the fires and firefighters and first responders who continue to serve on the frontlines.